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Facts
The Assessee purchased a property for Rs. 41,50,000/- while the stamp duty value was Rs. 45,76,743/-. The AO made an addition of Rs. 4,26,743/- under Section 56(2)(x) of the Act for the difference.
Held
The Tribunal held that the differential amount between the stamp duty value and the sale consideration was not more than the 10% "safe harbour" tolerance limit, which is applicable retrospectively. Therefore, the benefit of this limit could not be denied to the Assessee.
Key Issues
Whether the differential amount between the stamp duty value and sale consideration, not exceeding 10%, falls within the 'safe harbour' tolerance limit and is hence not taxable.
Sections Cited
56(2)(x), 250, 143(3), 143 (3A & 3B), 50C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “K (SMC
Before: SHRI NARENDER KUMAR CHOUDHRYSHRI PRABHASH SHANKAR
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 25.03.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. CIT(A)) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018-19.
Sunita Pandey 2. In this case, the Assessee during the year under consideration had purchased a property i.e. Flat No. 202, Anita Building No. 9 CHS Ltd, Lokhandwala Township, Akurli Road, Kandivli(E), Mumbai on a consideration of Rs. 41,50,000/- as against the Stamp Duty Value to the tune of Rs. 45,76,743/-, which resulted into attracting the provisions of u/s 56(2)(x) of the Act as alleged by the AO and making the addition of Rs. 4,26,743/- being differential amount between the value determined by stamp duty valuation Authority and the value declared by the Assessee, vide Assessment Order dated 09-03-2021 u/s 143(3) rws 143 (3A & 3B) of the Act, by the Assessing Officer.
The Ld. Commissioner on appeal, affirmed the aforesaid addition.
Having heard the parties and perusing the material available on record and giving thoughtful consideration to the rival contentions of the parties, we observe that admittedly, the differential amount between the stamp duty value and consideration shown by assessee is not more than 10% the "leverage granted" or "safe harbour" tolerance limit for the variation between the actual purchase value (sale consideration) and the official stamp duty valuation (circle rate) of a property as introduced in Sections 50C and 56(2)(x)) itself, which has been held to be retrospective in nature by various Courts and thus the benefit of such leverage as provided under the relevant provisions of the Act as applicable, cannot be denied to the Assessee.
Thus, considering the peculiar facts and circumstance in total, as the differential amount is not more than 10% of leverage as
In the result, Assessee’s appeal is allowed.
Order pronounced in the open court on 31.10.2025.